BERLIN, (Reuters) – Germany saw a slowdown in business activity for the third consecutive October. This was due to supply issues and increased energy costs, which drove inflation in Europe’s largest economy up to a new record.

IHS Markit’s October Purchasing Managers’ Indice (PMI) showed that services activity declined to a six-month low, at 52.4 in Oct from 56.2 the month before.

Composite PMI, which includes both manufacturing and services sectors, dropped to 52.0 in September from 55.5.

Phil Smith, an economist at IHS Markit said that the figures indicate the economy will lose momentum over the last three months of this year. The GDP grew by 1.8% quarter on quarter from July to September.

Service providers also reported supply issues, but overall, job creation was strong in this sector.

Propelled by an increase in energy costs, price pressures have intensified in the services sector.

Smith explained that while goods inflation remains high, it is not as high as services inflation. However, this latter is now at a record-breaking level because companies in the sector continue to pass onto increasing costs to customers.